Cooper Standard: Improved Operating Income and Positive Cash Flow Highlight Cooper Standard's Fourth Quarter and Full Year 2024 Results

NORTHVILLE, Mich. , Feb. 13, 2025 /PRNewswire/ -- Cooper-Standard Holdings Inc. (NYSE: CPS) today reported results for the fourth quarter and full year 2024. Fourth Quarter 2024 Summary Sales totaled $660.8 million , a decrease of 1.9% vs. the fourth quarter 2023 Operating income totaled $31.7 million , an increase of $36.2 million vs. the fourth quarter of 2023 Net income of $40.2 million , or $2.24 per diluted share, reflected an improvement of $95.4 million vs. the fourth quarter of 2023 Adjusted EBITDA totaled $54.3 million , or 8.2% of sales Net cash provided by operating activities of $74.7 million and free cash flow of $63.2 million Full Year 2024 Summary Sales totaled $2.73 billion , a decrease of 3.0% vs. 2023 Operating income totaled $69.8 million , an increase of 51.7% vs. 2023 Net loss of $78.7 million , or $(4.48) per diluted share, reflected an improvement of $123.2 million vs. 2023 Adjusted EBITDA of $180.7 million , or 6.6% of sales, increased by $13.6 million vs. 2023 Net cash provided by operating activities of $76.4 million and free cash flow of $25.9 million "We were able to deliver profit, cash flow and margin improvement essentially in line with our original guidance and expectations, despite lower production and foreign exchange headwinds," said Jeffrey Edwards , chairman and CEO, Cooper Standard. "The new organizational structure we implemented at the beginning of 2024 continues to drive significant efficiencies and cost savings and we expect to continue the momentum of operational excellence and margin enhancement in 2025." Consolidated Results Quarter Ended December 31, Year Ended December 31, 2024 2023 2024 2023 (Unaudited) (Unaudited) (Unaudited) (dollar amounts in millions except per share amounts) Sales $ 660.8 $ 673.6 $ 2,730.9 $ 2,815.9 Net income (loss) $ 40.2 $ (55.2) $ (78.7) $ (202.0) Adjusted net loss $ (2.9) $ (31.1) $ (56.7) $ (82.3) Income (loss) per diluted share $ 2.24 $ (3.16) $ (4.48) $ (11.64) Adjusted loss per diluted share $ (0.16) $ (1.79) $ (3.23) $ (4.74) Adjusted EBITDA $ 54.3 $ 27.6 $ 180.7 $ 167.1 Net cash provided by operating activities $ 74.7 $ 79.7 $ 76.4 $ 117.3 Free cash flow $ 63.2 $ 62.1 $ 25.9 $ 36.5 The year-over-year change in fourth quarter sales was primarily attributable to unfavorable foreign exchange, price adjustments, and unfavorable volume and mix. The year-over-year improvement in fourth quarter net income was primarily due to the reversal of certain deferred tax valuation allowances, lower non-cash asset impairment charges, savings generated from lean manufacturing and purchasing initiatives, normalized incentive compensation, restructuring savings, and lower raw material costs. These positive factors were partially offset by higher wages and general inflation, higher net interest expense and unfavorable foreign exchange. The year-over-year improvement in fourth quarter adjusted EBITDA was driven by savings generated from lean manufacturing and purchasing initiatives, normalized incentive compensation, restructuring savings, and lower raw material costs. These positive factors were partially offset by higher wages and general inflation, unfavorable foreign exchange, and unfavorable volume and mix. For the full year 2024, the change in sales was primarily due to unfavorable volume and mix, including price adjustments, the deconsolidation or divestiture of non-core businesses, and unfavorable foreign exchange. The year-over-year improvement in full year net loss was primarily driven by the reversal of certain deferred tax valuation allowances, the non-recurrence of refinancing and debt extinguishment expense, savings generated from lean manufacturing and purchasing initiatives, the non-recurrence of pension settlement expense, restructuring savings, normalized incentive compensation and lower interest expense. These positive factors were partially offset by unfavorable foreign exchange, unfavorable volume and mix, higher wages and general inflation, and increased restructuring expense. The year-over-year improvement in full year adjusted EBITDA was driven primarily by savings generated from lean manufacturing and purchasing initiatives, restructuring savings, and normalized incentive compensation. These positive factors were partially offset by unfavorable foreign exchange, higher wages and general inflation, and unfavorable volume and mix. Cash Flow and Liquidity Cash provided by operating activities in the fourth quarter of 2024 was $74.7 million . Free cash flow (defined as net cash provided by operating activities minus capital expenditures) in the fourth quarter of 2024 was $63.2 million , an increase of $1.1 million compared to the fourth quarter of 2023. The increase was driven primarily by improved operating earnings, collections on trade and tooling receivables, and inventory conversion, partially offset by higher cash interest payments. For the full year 2024, cash provided by operating activities was $76.4 million and free cash flow was $25.9 million . This compared to cash provided by operating activities of $117.3 million and free cash flow of $36.5 million in 2023. As of December 31, 2024 , Cooper Standard had cash and cash equivalents totaling $170.0 million . Total liquidity, including availability on the Company's undrawn revolving credit facility, was $339.2 million at year end. Based on current expectations for light vehicle production and customer demand for our products, the Company believes it has sufficient financial resources to support ongoing operations, execute planned strategic initiatives and service cash interest requirements on our debt for the foreseeable future. These financial resources include current cash on hand, continuing access to flexible credit facilities, and expected future positive cash generation. Adjusted net loss, adjusted EBITDA, adjusted loss per diluted share and free cash flow are non-GAAP measures. Reconciliations to the most directly comparable financial measures, calculated and presented in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), are provided in the attached supplemental schedules. Automotive New Business Awards The Company continues to leverage its world-class engineering and manufacturing capabilities, its innovation programs and its reputation for quality and service to win new business awards with its customers and capitalize on positive trends associated with electric vehicles. For the full year 2024, the Company received total net new business awards representing $181.4 million in incremental anticipated future annualized sales. The total included $105.8 million in net new business awards on electric vehicle platforms. Segment Results of Operations Sales Three Months Ended December 31, Variance Due To: 2024 2023 Change Volume / Mix* Foreign Exchange (dollar amounts in thousands) Sales to external customers Sealing systems $ 350,444 $ 351,582 $ (1,138) $ 4,167 $ (5,305) Fluid handling systems 294,841 305,371 (10,530) (7,873) (2,657) Total for reportable segments $ 645,285 $ 656,953 $ (11,668) $ (3,706) $ (7,962) Corporate, eliminations and other 15,468 16,690 (1,222) (1,222) - Consolidated $ 660,753 $ 673,643 $ (12,890) $ (4,928) $ (7,962) * Net of customer price adjustments, including recoveries. Adjusted EBITDA Three Months Ended December 31, Variance Due To: 2024 2023 Change Volume/ Mix* Foreign Exchange Cost (Increases)/ Decreases** (dollar amounts in thousands) Segment adjusted EBITDA Sealing systems $ 40,214 $ 27,347 $ 12,867 $ 1,012 $ (6,140) $ 17,995 Fluid handling systems 27,333 15,646 11,687 (6,945) (83) 18,715 Total for reportable segments $ 67,547 $ 42,993 $ 24,554 $ (5,933) $ (6,223) $ 36,710 Corporate, eliminations and other (13,264) (15,416) 2,152 (140) (1,609) 3,901 Consolidated $ 54,283 $ 27,577 $ 26,706 $ (6,073) $ (7,832) $ 40,611 * Net of customer price adjustments, including recoveries. ** Net of divestitures and restructuring savings. Outlook Industry projections anticipate global light vehicle production will be lower in 2025 compared to 2024. Inflationary headwinds are expected to continue. The Company expects to continue driving operating efficiencies to offset the production volume and inflation headwinds. As a result, Company management expects to deliver improved financial results in 2025 vs. 2024. Initial full year 2025 guidance ranges for key financial measures are as follows: 2024 Actual Results Initial 2025 Guidance 1 Sales $2.73 billion $2.7 - $2.8 billion Adjusted EBITDA 2 $180.7 million $200 - $235 million Capital Expenditures $50.5 million $45 - $55 million Cash Restructuring $26.5 million $20 - $25 million Net Cash Interest $97.3 million $105 - $115 million Net Cash Taxes $19.1 million $30 - $35 million Key Light Vehicle Productions Assumptions (Units) North America 15.5 million 15.1 million Europe 17.1 million 16.6 million Greater China 30.1 million 30.2 million South America 3.0 million 3.1 million 1 Guidance is representative of management's estimates and expectations as of the date it is published. Current guidance as presented in this press release considers January 2025 S&P Global (IHS Markit) production forecasts for relevant light vehicle platforms and models, customers' planned production schedules and other internal assumptions. 2 Adjusted EBITDA is a non-GAAP financial measure. The Company has not provided a reconciliation of projected adjusted EBITDA to projected net income (loss) because full-year net income (loss) will include special items that have not yet occurred and are difficult to predict with reasonable certainty prior to year-end. Due to this uncertainty, the Company cannot reconcile projected adjusted EBITDA to U.S. GAAP net income (loss) without unreasonable effort. Conference Call Details Cooper Standard management will host a conference call and webcast on February 14, 2025 at 9 a.m. ET to discuss its fourth quarter 2024 results, provide a general business update a